Friday, March 7, 2014

The crisis in Crimea won’t keep President Barack Obama from forging
ahead with a weekend getaway with his wife and daughters in the Florida Keys...The vacation is Obama’s third of the year - The Washington Post - LINK

The U.S. and Russia are inching toward a serious confrontation over the U.S.-led coup of the Ukrainian Government and Russia's move to protect its interests in Crimea, millions of people in this country struggle to make ends meet and Barack and Joe decide to take their families on a warm-water vacation.

It doesn't really matter because Obama and Biden are nothing but figureheads who represent the extremely wealthy corporate and individual interests which paid for their election. Those are the real players behind the scenes. They use Obama to sign the Executive Orders which enact the policies designed to make the real players even richer - at the taxpayer's expense, of course.

Notice how Biden has been mysteriously silent on the Ukraine situation? The White House can't afford the risk that Biden says something completely stupid, or "off-teleprompter," so I'm sure he was instructed to disappear. Obama has volunteered to stay away from Democratic incumbent campaigns because of his poor approval ratings, so he's pretty much dead weight until his term expires.

I guess the only problem I have with letting Obama and Biden go on perma-vacation is that the wealthy elitists should be funding their vacations and not the taxpayers.

The US economy remains in recession. And once the truth breaks out,
the stock market will slip into crash mode. The stock market is up on
Fed manipulations, and the economy is up on lies and propaganda. It’s a
poisonous combination - Richard Russell, King World News LINK

I encourage everyone to read that brief interview with Richard Russell.

As I discussed yesterday, we know the Government is lying through its teeth to us about the Ukraine situation. It's amazing how quickly CNN and Fox News seem to have misplaced the Victoria Nuland phone tape discussing the $5 billion the U.S. has "invested" to foment the unrest over there. You know, the one in which she says "F_CK the EU." Both CNN and Fox are disseminating nothing but the lies being promoted by Obama/Kerry etc without researching or reporting on the actual facts. Kind of ironic that CNN backs the Obama regime's backing of the neo-Nazis who have taken control of western Ukraine (I'm not surprised that Fox News supports this).

The Government also lies about the employment situation in this country. We saw the most recent example today with the Bureau of Labor Statistics monthly employment report claiming that the economy generated 175,000 jobs in February. I don't want to go through a detailed analysis of the data as reported and the obvious statistical manipulation implemented on that data. The real issue is the legitimacy of the data itself. This requires thinking about the data as presented in the context of every other business data report that was released during February, especially the reports from the private sector.

As one example, the BLS claims that the construction industry added a total of 55,000 jobs in January and February. Yet, we know from homebuilder reports that housing starts have been tanking. And what about the "bad weather" narrative. If housing starts declined over the period and bad weather prevented this, how on earth is it possible that profit-seeking businesses hired workers? Does anyone really think that a homebuilder executive, who is trying to keep his stock price elevated so he can unload as many shares as possible (see the recent S-4 SEC stock transaction filings - homebuilder execs dumped shares in February), would spend money hiring workers who don't have to work?

That's just one line item example. There are several. The point here is that if you look at the numbers being reported - regardless of how they are manipulated to paint a positive picture - in the context of everything else that has been reported about the economy, there's no possible way that the economy generated job growth in February. In fact, the ill-reputed "birth/death" model, which everyone understands is used as "plug" number the Government uses to pad the employment data, explains 125,000 of the 175,000 jobs reported. The birth/death model has been dissected and shown to be a complete fraud ad nauseum.

The smart money must understand this, because the S&P 500 futures gapped up nearly 10 points when the number hit the tape. It's currently trading down 3 points, 13 points lower than the initial buying orgy. The real damage was inflicted by the banks who manipulate the gold and silver market. Instantaneously as the report hit the newswires, gold was demolished for a total of $25 before recovering some of the manipulated damage. Right at the time the report was released, nearly 8,000 gold contracts were unloaded on the Comex.. To put this into context, in the 14 hours and 20 minutes of Comex gold futures trading that occurred from 6 p.m. the previous evening until the 8:30 a.m. Comex open today, the total volume was roughly 45 contracts per minute. You decide if the 8,000 contracts dumped at 8:30 a.m. was legitimate selling or motivated Fed/Govt manipulation

The most frightening part about all of this the fact that the Government finds it acceptable to lie to us about everything. The U.S. Government has become as corrupted and self-serving as was the old U.S.S.R Government that many of us grew up fearing. The lack of fear about what has happened in our own backyard is truly stunning.

Thursday, March 6, 2014

[Secretary of State, John ] Kerry, wallowing in his arrogance, hubris, and evil, has issued direct
threats to Russia. The Russian foreign minister has dismissed Kerry’s
threats as “unacceptable.” The stage is set for war. - Paul Craig Roberts

Before I elaborate on the above a quote with a few salient passages from PCR's brilliant analysis and commentary on the situation in Ukraine, I want to clarify for anyone reading this that the U.S. has funded and militarily supported a political regime in western Ukraine that has ingrained political and military roots with Hitler's Nazi Party. This is an undisputable fact. If you decide to fall for the Orwellian rhetoric flooding all of the U.S. news outlets, you are doing so out of complete ignorance of the facts.

Kerry has no answer to the question: “Since when does the United States
government genuinely subscribe and defend the concept of sovereignty
and territorial integrity?”

In working with Dr. Roberts on several collaborative articles about the U.S. Government's long term and massive intervention in the gold market, I have come to appreciate the deep insight and understanding he has for what is really happening behind "the curtain" in DC. His ability to communicate and elucidate this reality is nothing short of brilliant.

Washington wants missile bases in Ukraine in order to degrade Russia’s
nuclear deterrent, thus reducing Russia’s ability to resist US hegemony.
Only three countries stand in the way of Washington’s hegemony over
the world, Russia, China, and Iran.

His latest article on the truth about what is happening in Ukraine and why the U.S. has fomented political and civil chaos over there is a must-read for anyone who seeks the truth.

Everyone needs to understand that Washington is lying about Ukraine just
as Washington lied about Saddam Hussein and weapons of mass destruction
in Iraq, just as Washington lied about Iranian nukes, just as
Washington lied about Syrian president Assad using chemical weapons,
just as Washington lied about Afghanistan, Libya, NSA spying, torture.
What hasn’t Washington lied about?

If you are confused about the facts, please educate yourself with this article from geopolitical and economic analyst, William Engdahal: The [U.S.] Rape of Ukraine

Keep in mind that throughout history, the most definitive sign that a great Empire is in the latter stages of collapse is wantonly corrupted and reckless imperialism - of which we've seen many examples since Bush and Obama took office.

Tuesday, March 4, 2014

In a mainstream media disclosure that
took the gold investment world by surprise, Bloomberg published a
report - Article Link - last week which contained data from an academic study that
showed that the daily London gold price fixing has been manipulated
for at least 10 years. While this is not new information to many
precious metals investors, it is the first time that an establishment
news outlet has exposed the truth about the widespread and blatant Government-sponsored
manipulation of the precious metals market. It should be noted that the Financial Times also published this report but then retracted and deleted the article.

The London daily gold fix is an event
that has been setting the price of gold twice a day since 1919. With
the advent of computerized market trading and the gold/silver futures
market (1974), it would appear that the London fix is no longer
necessary as a mechanism of "price discovery." As we will
see, the London fix still exists because it is used by the bullion
banks as an overt market manipulation mechanism.

The price "fixing" is
conducted by 5 individuals who work for their respective bullion
banks. These individuals jointly decide what the
"spot" price of gold should be twice a day, once in the
morning and once in the afternoon (London time). They committee is
allowed to communicate with market participants and their respective
banks are permitted to continue trading gold and gold derivatives
while these individuals decide what the price of gold should be. Theoretically this price as "fixed" is determined to be the price which will clear the market of all buy and sell orders up to that point. Theoretically, it provides a "benchmark" price for the spot price of gold. Incredibly, the time of fix occurs during the period of time when the Shanghai Gold Exchange, the largest physical gold market in the world, is closed for the day.

But how can a closed system like this
possibly operate objectively? The gold fix system is inherently
ingrained with the conflict of interest and moral hazard the accompanies
any system governed by collective "judgment." The
Bloomberg News article details a study done by NYU
professors which showed that between 2004 and 2013 large price moves
during the afternoon "fix" were moves lower at least 66% of the
time. In 2010, the large moves were negative 92% of the time.

From their work, the authors concluded
that the market in all probability was manipulated by the banks whose
representatives establish the price fix every day: "There’s
no obvious explanation as to why the patterns began in 2004, why they
were more prevalent in the afternoon fixing, and why price moves
tended to be downwards" - Rosa Abrantes-Metz, one of the
authors of the study.

As it turns out, Ross Norman, CEO of
the well-known London-based Sharps Pixley bullion retailer issued a
rebuttal to the Bloomberg article and in defense of the London fix (LINK).
Ironically, in his attempted defense of the gold fix process, Norman
inadvertently exposes the system's inherent flaws, thereby showing
the reader how the London fix committee can easily manipulate the
market. In fact nearly every point of assertion about, and defense of, the London fix process is embedded with
half-truths or outright lies.

In response to the fact that there are
unusually large moves during the "fix" period, Norman
explains: "the fix is a price discovery process and as such large
buying and selling orders collide here - large moves are therefore to
be expected. In fact, the mere fact that it does move confirms some
differences in opinion over fair value between the clients dealing in
the fix - actually it supports the notion of the integrity of the
process."

This explanation is is patently
disingenuous. Gold trades in either physical form or derivatives
form (futures, forward) nearly continuously during the trading week.
The "price discovery" process occurs inherently with every
buy/sell transaction. To say that it is only at the time around the
p.m. London fix that large orders to buy and sell constitute "price
discovery" is entirely misleading. In a continuously functioning
market, orders of all sizes are executed and "price discovery"
occurs with each trade execution. A committee of five individuals is
not needed and collective "judgment" about what the price
should be is not required.

In his second point of defense of the
London fix, Norman makes these comments: "the fix is used by
official institutions (like Central Banks) and many major miners who
all require an "objective" and published price because they
need to [be] more accountable than say (sic) a proprietary trader.
The spot price for example is neither of objective (sic) nor
published. Selling by miners in size every day and invariably
outweighs (sic) any official buying which is typically large but
infrequent. Hedging or financing for the miners have will often (sic)
link their financial arrangements to the gold fix."

Just as a note, it's interesting that
Norman decided to put quotes around the word "objective."
Clearly the London fix is anything but "objective," since
by it's very nature it defies the objectivity and price discovery
mechanism of a continuously functioning market. I'm not sure why a
"fixed" price needs to be "published" at all. At any given time during the 23 hour trading period of each
business day gold trades in either physical or derivative form
(futures, forwards). Anyone can go online and "discover"
the current trading price of gold.

To be perfectly clear about this, any
price which is determined in the market by a buyer and seller is
inherently more objective and visible than is a price which is
"fixed" by a committee of five individuals saddled with
inherent conflict of interest. Mining companies and Central Banks
are free to use the standard market mechanisms to execute their
trades. To say that a committee operating out of view of the market
can determine an official "spot" price is either
unintentionally disingenuous or an outright lie. If
anything, the London fix process prevents the
true price discovery process of an open and free market.

Norman also claims the London fix conference
call is not private and is open to clients. Do you have access to
this call? Our firm does not. I don't know of anyone who has
access to this call. While the price fix committee of five may have
information about the large buy and sell orders that are about to
"collide" - to use Norman's term - the market as a whole
does not. An efficient market functions most efficiently in its
price discovery process when as much information as possible about
buyers, sellers and size is immediately disseminated to the entire
market. The London price fix system not only prohibits the
dissemination of information that might help the market achieve its
price discovery goals, it leaves the discretion as to the "best"
market clearing price at that point in time up to the committee of
five who may or may not be on the phone with their best preferred LBMA
member clients or their own banks.

Again, to reemphasize this point
because it can not be emphasized enough, the price fix committee
members have de facto conflict of interest by the very fact that the
banks they work for have large capital positions in gold and silver.
Furthermore, while detailed LBMA position data is not made available to the
public, we know that these banks run large net short positions on the
NY Comex. To say the least, the banks have a motivated interest to
see a lower price fix every day.

Norman next tries to defend against
the findings of the study that the price of gold at time of the p.m.
fix is fixed lower a majority of the time - with the statistical
evidence overwhelmingly in support of this conclusion - by explaining
that if London gold dealers (i.e. the bullion banks) "had
consistently shorted gold as maintained" they would have
suffered massive losses.

This assertion is absurd because it
assumes that the big bullion banks are always long gold. Yet, we
know from over a decade of Comex data that the big bullion banks have
run massive short positions in Comex gold futures. We don't know
whether the big banks are net long or net short on the LBMA because
the LBMA does not publish enough information about the big bank forward
contract and bullion positions. In fact, from the size of the
historical net short position of the big banks on the Comex, and the
accompanying trading turnover of these positions, any bank with
access to information about the level of the price fix before the
general market sees it has the ability to net rapid and riskless
trading gains on a daily basis.

Finally, Norman tries to deflect the
issue entirely by opining on the "vested interest" of
Bloomberg in publishing this article and ends by scolding the organization ("shame on you...for lack of journalistic
discretion and judgment...and failure to ask the right questions").

As Norman tolls this bell of scorn and
disdain for Bloomberg News, ironically he's ringing it at himself, as
Norman's disingenuous defense of the LBMA gold price fix
surreptitiously exposes the reasons why the gold fix process is
highly flawed. Indeed, it is a system of price determination which
is susceptible to the moral hazard and market misconduct which
accompany any market system in which price level is determined by a
small committee individuals, all of whom have a high level of
inherent conflict of interest.

One last point, Norman is correct that
Bloomberg fails to ask the right questions. Here's a small sampling
of the right questions: 1) Given that the gold market trades nearly
continuously during the business week, either by auction or computer,
why is the London fix needed at all? 2) Why does the fix occur after the Shanghai Gold Exchange, the worlds largest physical bullion market, has closed for the day? 3) Why are the members of the
price fix committee allowed to be representatives of the big bullion
banks? 4) if #2 is unavoidable, shouldn't the members be from
organizations which do not run capital positions in gold and silver
or stand to benefit from inside knowledge about the price fix? 5)
Why doesn't the LBMA publish more specific and detailed data about
the forward contract and bullion positions of its member banks?

"We hold a decent amount of treasury bonds – more than $200 billion –
and if the United States dares to freeze accounts of Russian businesses
and citizens, we can no longer view America as a reliable partner,” he
said. “We will encourage everybody to dump US Treasury bonds, get rid of
dollars as an unreliable currency and leave the US market."

Many of us have been wondering when one the of the large holders of U.S. Treasuries was going to brandish a freshly sharpened sword and threaten to swing it at the Achilles' Heel of the United States.
The quote above is from an advisor to Putin in response the the threat of the U.S. implementing economic sanctions against Russia. You can read the article from a Russian newspaper here: (sourced from Zerohedge) LINK

While I highly doubt that Russia will actually dump Treasuries as a form of financial war against the U.S. - at least this time - the Putin advisor just made it clear that several powerful countries, with interests that often conflict with U.S. imperialistic behavior, hold a weapon of defense that is the equivalent of a financial nuclear bomb.

What's most fascinating about watching the Ukraine events unfold is the shamelessness with which the U.S. attempts to impose its will on Russia for defending its own interests, and yet the U.S. wantonly goes into countries like Iraq and Libya, assassinates the leader, overthrows the Government and installs its own puppet. It's truly amazing, if not utterly Orwellian, the way in which the major U.S. media outlets have conveniently forgotten about the Victoria Nuland tape that Russia released discussing the U.S. role in destabilizing Ukraine in the first place.

The biggest problem for the U.S. is that, despite the progressively fraudulent Government reports to the contrary, the U.S is spending far more everyday to keep the lights on than it takes in to cover those expenses. Watch this year as the spending deficit increases dramatically. We'll soon understand why the Obama Government pushed so hard to remove entirely the debt ceiling limit.

Unfortunately, it is becoming increasingly apparent to anyone who examines the facts which belie U.S. Government pomp and circumstance that, short of unleashing nuclear weapons, the U.S. is only capable of bringing knives to a gunfight.

Eric Arthur Blair aka George Orwell

"Hope" is not a valid investment strategy

Full Time Jobs Over Last 5 Years

Is Your Gold Missing?

Why Gold?

Gold is the world's oldest currency. You exchange your fiat currency (dollars, euros, yen, yuan) into gold as an insurance policy against catastrophic Central Bank and Government policies which serve to destroy the value of fiat currencies and destroy democracy.

Gold can ONLY be considered an investment to the extent that it remains significantly and historically undervalued in relation to the fiat currencies against which its value is measured. Otherwise it remains the world's oldest currency and is completely free from the counterparty risk associated with currency by Government fiat (i.e. fiat currencies rely on a Government's "full faith and credit.")

Epic Quote - "Jesse" Sent This To Me

"The world will soon wake up to the reality that everyone is broke and can collect nothing from the bankrupt, who are owed unlimited amounts by the insolvent, who are attempting to make late payments on a bank holiday in the wrong country, with an unacceptable currency, against defaulted collateral, of which nobody is sure who holds title." - Anonymous

The Basic Fundamental Problem

What's the solution?

“THERE IS NO MEANS OF AVOIDING THE FINAL COLLAPSE OF A BOOM BROUGHT ABOUT BY CREDIT EXPANSION. THE ALTERNATIVE IS ONLY WHETHER THE CRISIS SHOULD COME SOONER AS THE RESULT OF A VOLUNTARY ABANDONMENT OF FURTHER CREDIT EXPANSION OR LATER AS A FINAL AND TOTAL CATASTROPHE OF THE CURRENCY SYSTEM INVOLVED.”

Ludwig von Mises – Austrian Economist (1881- 1973)

Quote Of The Month Courtesy of "Jesse"

Unfortunately for Larry Summers, Ben Bernanke, and their friends at the BIS, they have not yet figured out how to print physical gold, silver, and other essential commodities, and the world is reaching the point where it might simply start ignoring the New York based markets with respect to essential commodities such as basic materials, oil, foodstuffs, and the like, as they become increasingly irrelevant, fraudulent, and Orwellian. And then where will the financial engineers be, except with no more excuses and no place to hide?

Great Quote From Jim Rogers On Govt CPI Reporting

JR: I mean, we have inflation now. If you go to the shop, whether it’s groceries, or education or insurance or health care, prices are going up for everything. The government lies about it in the US. Some countries lie, many countries don’t: Australia, China, India and Norway. Many countries don’t lie about it and acknowledge that we have inflation. Others lie about it, the UK and the US, but if you go shopping you know prices are up.

Q: Are you saying that the American Consumer Price Index (CPI) published by the US Bureau of Labor Statistics is a lie? JR: In my opinion, yes, of course it is. Have you looked at it? They’ve changed their accounting several times in the past few decades. When housing was 20% to 25% of the CPI and housing was going up, they didn’t count it, saying rents weren’t going up, and then when home prices started going down, they counted it. It’s the same with many things. It’s staggering some of the tortuous reasoning that the BLS has used over the past 25 or 30 years. When the price of gasoline goes up, they say it’s not really going up because it’s better gasoline, better quality, therefore you’re getting more for your money. I mean, it’s endless, the stuff that they say and for some reason people sit there, although more and more people are catching on, and accept what the government says.

Priceless Quote From Richard Russell

On Larry Summers: This doofus practically ruined Harvard when he headed it. I can't think of a worse choice to be chief economic advisor. I wouldn't trust Summers to manage a Starbucks franchise.

Quote of the Week

"The primary function of a Central Bank is to engage in the massive transfer of wealth from the middle class to the wealthy elite. The Federal Reserve was set up to do this with the blessing and support of Congress." - Dave in Denver

If you refuse to believe the above, please read "The Creature From Jekyll Island: A Second Look at the Federal Reserve" by G. Edward Griffin and then explain to me why the Senate voted down the Vitter Amendment and Congress refuses to pass a law requiring a full audit of the Fed, even though the Fed is using taxpayer-backed money to bailout Wall Street and Europe.

Quote of the Month

And very relevant in the context of yesterday's post about gold moving higher against all fiat currencies:

Just imagine what would happen if a mere ten percent of the money currently going into bonds were instead to go into gold. As in 1972, the real move has yet to begin.

- Murray Pollit, Pollit & Co.

A Picture Says It All...

www.moneyandmarkets.com

Golden ore samples produced by Eurasian Minerals

Undisclosed exploration site

The Next Reserve Currency?

1 oz. Chinese Panda

Guess who said this?

Rising prices of precious metals and other commodities are an indication of a very early stage of an endeavor to move away from paper currencies...What is fascinating is the extent to which gold still holds reign over the financial system as the ultimate source of payment.

-Alan Greenspan, 9 Sep 2009

THIS is what REAL money looks like

1 oz. Gold Eagles

Alan Greenspan said what?

“Deficit spending is simply a scheme for the ‘hidden’ confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights.”

From "Gold and Economic Freedom" a 1966 Essay by Alan Greenspan

About Me

I spent many years working in various analytic jobs and trading on Wall Street. For nine of those years, I traded junk bonds for a large bank. I have an MBA from the University of Chicago, with a concentration in accounting and finance.
Currently I co-manage a precious metals and mining stock investment fund in Denver.
My goal is to help people understand and analyze what is really going on in our financial system and economy.